The Office of Inspector General (“OIG”) of the United States Environmental Protection Agency (“EPA”) released a report on January 12 titled:
EPA Title V Program to Address Ongoing Fee Issues and Improve Oversight (“Report”)
See Reporting No. 22-E-0017.
Congress in 1990 added Title V to the Clean Air Act to ensure that stationary sources were subject to a full air permit. All major stationary sources of air pollution must apply for a Title V operating permit. These permits include emission limits and other conditions necessary to ensure compliance with applicable Clean Air Act requirements.
The Title V operating permit program does not generally impose substantial new air quality control requirements. The intent of a Title V permit is to organize in a single document the air requirements that apply to the permit holder. It requires Title V permits to contain adequate monitoring, record keeping, reporting, and other requirements to ensure source compliance with applicable requirements.
States have the option of developing their own Title V programs and submitting them to the EPA for approval. For example, Arkansas’ Title V mining program was approved by the EPA many years ago.
A state licensing authority is required to collect fees from sources required to obtain Title V operating permits. These fees must be sufficient to fund all reasonable costs of the permitting program. Specifically, EPA 40 CFR Part 70 regulations require licensing authorities to assess the annual fees of Title V sources according to a fee schedule that results in the collection and retention of sufficient revenue to cover program costs. of permits.
Title V license fees are used for:
- Implementation and enforcement of the permit program
- Review of new permit applications
- Review revisions or renewals of existing permits
- Facility Compliance Monitoring
- Take enforcement action in case of non-compliance
- Performing monitoring, modeling and analysis
- Monitoring of facility emissions
- Preparation of emissions inventories
The OIG says it prepared January 12 Reporting determine the extent to which EPA has conducted an evaluation of state/local Title V programs to identify under-collection or misuse of royalties. The EPA is expected to ensure that state/local programs collect the fees necessary to meet applicable legal and regulatory requirements.
The OIG says it interviewed EPA staff and officials as part of its assessment. In addition, 31 assessments of EPA Title V fees and programs were reportedly conducted from 2018 to 2020 to assess fee oversight activities.
The EPA reportedly raised concerns about:
. . . declining revenue from Title V programs and the use of non-Title V revenue to fund Title V programs.
For example, nine of the EPA’s 10 regions reportedly cited declining revenues as a “major challenge facing licensing authorities.” Another challenge cited by regions was Title V funds being diverted by state legislatures for purposes unrelated to the Title V program. the state.
The OIG concludes that EPA’s regional reviews of Title V fee issues “varied considerably.” The report notes:
. . . for example, some regions have conducted fee assessments that have looked at financial data, while others have relied on only a few fee-related issues.
The OIG says EPA staff were unaware of Title V fee requirements and the resources needed to conduct assessments.
The OIG recommends that the EPA Assistant Administrator for Air and Radiation coordinate with EPA Regions to provide recurring training to competent authorities on property rights laws and regulations. It also recommends that the EPA:
- Develop and implement a plan to address declining Title V revenue
- Update 2018 EPA guidelines to establish timelines for completing corrective actions
- Establish criteria for determining when regions should conduct fee assessments
- Train regional EPA staff on updated fee guidelines
- Collaborate with regional staff to identify regional resources and expertise needed to perform fee assessments
A copy of the OIG report can be downloaded here.